Measuring Up Your
Suppliers
Suppliers that have had experience with
non-traditional purchasing concepts, alliances and partnerships definitely have
an advantage when it comes to developing a deep relationship with them. Make
sure you take the time to explain your procurement or supply chain strategy to
them and to take the time to understand their strategy. They need to know
what’s in it for them. Make it clear and measurable. Feeling good about each
other will not get to the bottom line. Appearances do count. You can size up a supplier’s partner quotient
a lot by actual site visits and talking to their employees at all levels.
Smiling faces are better than growls and disgruntled remarks. This new frontier
with suppliers has some particular characteristics. These characteristics include most favored
customer contracts, elimination of incoming inspection, reduction of supplier
base, early supplier involvement in design, value engineering, mutual cost
reductions, targeting of non-production company costs, the complete integration
of key suppliers into the business, and extensive use of cross-functional
teams. This quantum leap philosophy
with suppliers requires the education of purchasing personnel, rapid access to
information and supplier empowerment. Cross-functional business teams and a
constant dedication to improve and to reduce time to market are key elements.
Quantum
leaps are usually made by actually listening to the supplier and implementing
their recommendations. Rarely do they occur from internal suggestions.
Suppliers are the experts on their particular parts or service not you. Heed
their suggestions.
We once had
a supplier recommend a simple design change on an iron casting. Not only was it
cheaper but the production line was ecstatic because it was much easier to
assemble. The former appendage of the old design had often broken off during
assembly.
